Market Insider

Finally, A Bullish Report

Statistics Canada came out with their first production estimates of the 2017 Canadian crop on Thursday, August 31st. For once, they weren’t bearish! 13,300 Canadian farmers were surveyed between July 19th and August 1st on their acres, yield and total production. However, while the numbers below are considered bullish, there has certainly been some healthy rains that have fallen since then, especially in Western Canada where most grain is produced in the Great White North.

Total wheat production in Canada is slated to hit 25.5 million tonnes off an average national yield of 42.5 bushels per acre. Last year, average yields were 53.7, while the 5-year average is 48. Total Canadian wheat output is also 17% below the 5-year average. In Alberta specifically, spring wheat average yields are pegged at 50.7 bushels per acre, which should add up to 7.87 million tonnes according to StatsCan. These numbers aren’t far below their 5-year averages but it’s a different story for durum wheat. While total durum production in the Wildrose province is slated to come in at 974,600 MT (and above the 5-year average), average yields this year of nearly 33 bushels per acre are a far cry of over 47 averaged over the previous 5 years.

Sidenote: After knowing your cost of production, knowing the quality of your wheat is the most important thing when marketing it. Get your grain tests ordered from any and all testing companies at GrainTests.com.

On canola, national Canadian production is pegged at 18.2 million tonnes off an average national yield of 34.1 bushels per acre. Comparably, over the past 5 years, Canadian yields have averaged nearly 36 bushels per acre and production’s mean has been 17.36 million tonnes. Alberta canola yields are expected to average 37.6 bushels per acre, more than 15% below last year but only 3.5% below the 5-year average. This year’s crop in Alberta looks to hit 6.06 million tonnes, roughly 4% above the 5-year average (mainly because of increased acreage). We think filling new crop contracts is a priority before looking out into late October for our next likely sale.

Canadian Barley production is forecasted by StatsCan at 7.2 million tonnes. That’s 18% below last year and 15% below the 5-year average. In Alberta, only about 3.72 million tonnes will get taken off this year, a 15% decline from last year and more than 18% lower than the 5-year average. From a yield perspective, Alberta barley should average 69 bushels per acre this year, versus last year’s 73.3 and the 5-year average of 71.1. The national barley average this year should be about 63.4 bushels per acre. Thanks to the heat, protein could be up in your barley, so if you’re looking to sell for malt, get it tested and know its protein, germ, chit, and other important factors buyers will need to know.

For the 4th-largest crop in Alberta, peas, the province is expected to harvest 1.9 million tonnes with an average yield of 38.8 bushels per acre. Both yield and production numbers are about 16% below last year’s, but total production is actually more than 25% above the 5-year average. Nationally, total pea production will top 3.79 million tonnes. This is almost 22% lower than last year but barely changed from the 5-year average.

Overall, it’s great see a bullish report from Statistics Canada finally. However, while we’re certainly optimistic on higher prices for some crops in the coming months, we are sellers of feed grains, oats, and winter cereals.